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Tax overview
We like paying tax. It means we’re making money, which is a measure by which business success is generally judged. Who wants to deal with an unprofitable company?
When it comes to taxation, the USA is more like 51 countries (50 states and one district - all autonomous) than one federation. There are:
- Federal taxes
- State taxes
- Local taxes
The above are applied in some way or another to:
- Individuals.
- Business.
- Other entities and organizations.
All of which suggests you need a US accountant to help you through the complexities. Actually, the US tax system is no more complex than the UK one looks to an American. As some 27 million businesses seem to manage to deal with their taxes, perhaps it is not so complex after all.
ExportAction does not offer or provide legal or financial advice. We are, however, prepared to share our own experience and that of our clients. We suggest to every company we talk with to engage a US Certified Public Accountant in the US (and not an affiliate of a UK accounting firm) to advise on financial issues. It is helpful if your US accountant and US attorney have experience of representing UK companies and work well together.
As at January 2010, all states except Alaska, Delaware, Montana, New Hampshire and Oregon, collect sales taxes. Delaware collects a Gross Receipts Tax (GRT), which is a business and gross receipts tax that can total 2.07%. Some have a single rate throughout the state though most permit local city and county additions to the base tax rate.
States with the highest sales tax are: California (8.75%), Indiana (7%), Mississippi (7%), New Jersey (7%), Rhode Island (7%), Tennessee (7%), Minnesota (6.875%), Nevada (6.85%), Washington (6.5%), Texas and Illinois (6.25%).
Of the 50 states, 41 impose income taxes. New Hampshire and Tennessee apply it only to income from interest and dividends. Seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) do not tax personal income.
Florida has: NO state personal income tax guaranteed by constitutional provision; NO corporate income tax on limited partnerships; NO corporate income tax on subchapter S-corporations; NO corporate franchise tax on capital stock; NO state-level property tax assessed; NO property tax on business inventories; NO property tax on goods-in-transit for up to 180 days; NO sales and use tax on goods manufactured or produced in Florida for export outside the state.
Florida also offers many Sales and Use Tax Exemptions including: machinery and equipment used by a new or expanding Florida business to manufacture, produce or process tangible personal property for sale; labor, parts and materials used in repair of and incorporated into machinery and equipment; electricity used in the manufacturing process; semiconductor, defense and space technology-based industry transactions involving manufacturing equipment; machinery and equipment used predominantly in research and development; labor component of research and development expenditures; production companies engaged in Florida in the production of motion pictures, made for television motion pictures, television series, commercial music videos or sound recordings.
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